Singapore Private home prices up 0.2% in Q2, slower than earlier estimate

Singapore Private home prices up 0.2% in Q2, slower than earlier estimate

By Ng Baoying,

Condominium in Singapore

SINGAPORE: Prices of private homes in Singapore grew at a slower pace in the second quarter than initially projected – climbing at just 0.2 per cent against an earlier estimate of 0.4 per cent.

This is a far cry from the 3.7 per cent growth in the previous three months.

Analysts said this is the first time that final numbers have come in lower than flash estimates, suggesting that home prices are finally softening.

Mass market homes are carrying the overall price increase in the private residential property sphere as luxury home prices nudge downwards.

Prices outside the central region were up by 0.9 per cent, compared to a 0.1 per cent dip in the core central region.

Leonard Tay, director of Research, CB Richard Ellis, said: “Overall, we see a return of volume in (the) residential market in second quarter as quite encouraging.

“In the next two quarters, at least for the whole of 2008, we think volume will be sustainable and we expect transaction volumes for new home sales to finish the year at 4,000 to 5,000 units.”

In the second quarter, 70 per cent of new home sales were from the non-central areas. Colliers said Singapore’s positive mid-term prospects on the back of the completion of its two integrated resorts and Marina Bay Financial Centre will help to hold prices steady, and ensure that they do not decline by more than 3 per cent in the third quarter.

Overall, analysts said the residential property sector fared reasonably well in the first half of 2008, given the difficult external environment.

Ku Swee Yong, director of Marketing and Business Development, Savills (Singapore), said: “Transaction levels, price levels have held up pretty well. Most people have forgotten that the transaction in the first half of 2005 is similar to that of today. So it’s not as bad as what the market thinks.”

In the public housing market, resale prices continued to increase on the back of strong demand. They rose by 4.5 per cent, up from 3.7 per cent in the first quarter.

Meanwhile, office rentals went up by 6.3 per cent in the second quarter – the lowest increase in the past two years.

Analysts said they expect rents to remain flat for most of 2009 before trending downwards in 2010 to what they call more sustainable levels of S$12 to S$15 psf per month in the core business district.

In the next six to 12 months, landlords are expected to shift from profit focus to tenant retention as tenants start resisting further rental price increases.

In the industrial property sector, strong demand has pushed the average occupancy rate for factories to its highest since 2000, at 93.1 per cent. The take-up for warehouses also increased by 0.4 percentage point in the second quarter.

Despite the healthy take-up for both types of industrial space, the rental index for warehouses has remained unchanged for the quarter, while the index for factories rose by only 2.3 per cent quarter-on-quarter in the second quarter, compared to a quarter-on-quarter increase of 5.7 per cent in the first quarter.

As such, demand for industrial space is expected to remain healthy in the third quarter, but rents may only see a slight increase.

- CNA/so

Source : Channel NewsAsia - 26 July 2008

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CapitaLand appeal on Singapore Gillman deadline

CapitaLand appeal on Singapore Gillman deadline

CAPITALAND, the lead buyer of Gillman Heights, has asked the Court of Appeal to review one point of a High Court ruling that allowed the estate’s collective sale to proceed.
Its move comes after a group of 10 minority owners from the estate filed an appeal over the sale earlier this week.

CapitaLand bought the $548 million Gillman Heights site together with Hotel Properties and two private funds. The sale was opposed by some owners but was eventually given the go-ahead by the High Court.

But in dismissing the objecting owners’ appeal, the Court also ruled that the sale committee could not agree to extend the deadline for obtaining the Strata Titles Board’s approval to Feb 5.

This was despite a supplemental collective sale agreement that had made a valid extension of the deadline to this date.

It is this point that CapitaLand is focusing on. Its legal move is to protect itself if the point is raised by the minority owners at the court hearing.

A spokesman said: ‘The filing of the cross-appeal is primarily technical and the aim is to preserve and strengthen our position in the Court of Appeal hearing.’

JOYCE TEO

Source : Straits Times - 26 July 2008

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Singapore Yishun to get exciting new facilities in facelift

Singapore Yishun to get exciting new facilities in facelift

Among them are a library and possibly a shopping complex linked to interchange

By Francis Chan

IN THE WORKS: More outdoor and sporting facilities will be built in Yishun under the plan to remake the estate. Also on the cards is a new boardwalk to connect the town centre to the outdoor areas.

YISHUN might be showing its age but it is in line for a radical renewal that will smarten up existing facilities and add exciting new ones.
Details of the rejuvenation plan were announced yesterday, and include additions to the town centre, including the Khoo Teck Puat Hospital, a new library, covered walkways and possibly a new shopping complex integrated with the bus interchange.

A new boardwalk will also connect the town centre to outdoor areas like Yishun Pond.

The plan, Remaking Our Heartland: Enriching My Yishun, is part of a nationwide Neighbourhood Renewal Programme announced by Prime Minister Lee Hsien Loong in his National Day Rally speech last year.

Its aim is to enhance the value of homes and neighbourhoods through upgrading and estate renewal projects.

‘Through this initiative, the Government will build the HDB heartland of tomorrow to match the rising expectations of our people and make Singapore our best home,’ said National Development Minister Mah Bow Tan, who outlined the Yishun details yesterday.

‘Give us another five years and you’ll be able to see the change in Yishun.’

Residents are keen on the plan. Mr Jef Ng, 27, who has lived in the area for 13 years, told The Straits Times: ‘It is high time Yishun got a facelift. We have always felt somewhat neglected, but these new plans sound really exciting.’

Mr Mah also officiated at the launch of the first Home Improvement Programme (HIP) in Singapore.

The HIP allows flat owners to have certain essential improvements carried out at the expense of the Government, which will also subsidise some optional ones.

Owners can vote on the work they want done at their estates and in their flats. Essential improvements include mending weathered concrete and replacing waste pipes, while optional ones refer to upgrades of toilets, entrance doors, metal grille gates and refuse hoppers.

Owners co-pay between $550 and $1,375 if they choose any of the optional improvements, depending on flat size.

Exhibitions have been set up in Yishun Street 21 to give owners a better idea of their options under the HIP before they vote on their choice of improvements.

Polling closes on Monday. HDB needs a minimum support of 75 per cent from eligible residents before works can be carried out.

‘I encourage residents to take some time to tour this HIP exhibition and the Enriching My Yishun exhibition at the town centre,’ said Mr Mah.

‘With feedback and participation, we can make Yishun an even more vibrant and exciting place to live and play.’

Source : Straits Times - 26 July 2008

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New tunnel from Singapore Sentosa Gateway to ease traffic

New tunnel from Singapore Sentosa Gateway to ease traffic

By Maria Almenoar

THE Government unveiled plans yesterday for a new tunnel that will link the entrance to Sentosa Island with Kampong Bahru and Keppel roads.
The 1.3km span is designed to relieve congestion around the Sentosa Gateway, which is expected to see a huge jump in traffic after the island’s integrated resort opens in 2010.

‘The area will require additional transport infrastructure to support the growth and maintain a positive travel experience for visitors,’ said Land Transport Authority (LTA) chief executive Yam Ah Mee.

The mostly two-lane tunnel, scheduled for completion in 2015, will only be open to traffic leaving the resort island, the LTA said. That is because it will pass near the North East and Circle lines, making for a tight fit.

The tunnel will start along the stretch between VivoCity and St James Power Station and end along Kampong Bahru Road and east-bound Keppel Road.

Drivers will be able to bypass the busy junction between the Gateway and Telok Blangah. About 6,000 cars now pass through the intersection during evening peak periods. That number is poised to rise to over 10,000 between 2010 and 2015 with the opening of the integrated resort, commercial buildings and condominiums.

The LTA said motorists who use the tunnel will see their travel time drop by 50 per cent to 10 minutes. Those travelling on surface streets will see their travel time drop by 25 per cent.

Officials opted for the outbound route because most of the evening traffic through the area are cars leaving Sentosa.

The tunnel announcement comes on top of other road works being done in the area that began in June. Crews are adding lanes to Telok Blangah Road and widening Kampong Bahru Road, among other things. These works are expected to be completed in time for the opening of the integrated resort on Sentosa.

The LTA will start preliminary work on the new tunnel, which includes laying cables, by the end of the year.

Tunnel works proper will begin only by 2011.

The LTA said there will be minimal disruptions for motorists.

Source : Straits Times - 26 July 2008

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Sharp drop in growth of Singapore private home prices

Sharp drop in growth of Singapore private home prices 

HDB resale flats, however, do well, strengthening in value

By Fiona Chan, Property Reporter 

IT’S official: the private housing market has gone soft.

Prices peaked and rental growth braked sharply between April and June, with property consultants forecasting the beginning of a decline.

But Housing Board resale flats defied the trend and continued to strengthen in value as sales grew amid strong demand for cheaper homes.

Private home prices inched up just 0.17 per cent in the quarter - the least in four years and well below the 3.8 per cent in the first quarter.

The minuscule rise, announced by the Urban Redevelopment Authority (URA) yesterday, was even below the 0.4 per cent increase the agency had predicted at the beginning of this month.

This is the first time that the official figure has come in lower than forecast, ‘a strong indication that home prices are finally softening’, said Ms Tay Huey Ying, director of research and consultancy at Colliers International.

Prices are being dragged down by stubbornly gloomy market sentiment, stemming from the slowing global economy, high inflation and erratic stock market, say experts.

Developers have started to price projects more ‘realistically’ and individual home sellers are accepting lower offers, leading to an overall moderation of prices, according to Mr Li Hiaw Ho, executive director of CBRE Research.

In prime districts, prices of luxury homes dipped for the first time in four years after a spectacular climb of almost 70 per cent since 2005.

‘This is the first fall since the start of the property boom in 2004 and could be the turning point in the price trend,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

City-fringe and suburban homes barely fared better, with prices rising below 1 per cent in the second quarter.

Growth in home rents also halved in the second quarter to just 2.5 per cent, the lowest in two years. This could be due to fewer expatriates coming in as well as landlords starting to lower their asking rentals, said Mr Mak.

CBRE’s Mr Li predicts an ‘inevitable’ correction in prices ‘to the tune of 5 per cent to 10 per cent’ in the second half of the year.

But Ms Tay from Colliers believes Singapore’s mid-term prospects remain positive on the back of the two integrated resorts. This will ‘hold prices steady and ensure they do not fall by more than 3 per cent in the third quarter’, she said.

Still, caution prevails amid a large chunk of unsold homes waiting in the pipeline. Developers are sitting on some 12,500 new homes that are ready for launch, said URA.

Hopeful homebuyer Timothy Gan, 27, was cheered by the news that prices may fall. ‘I’m waiting for their prices to fall so I can get married,’ said the civil servant.

Prices and rentals of offices also grew more slowly in the quarter, as firms eased pressure on office supply by moving out of the central areas.

The bright spot is the HDB resale market, where prices keep rising due to higher valuations and strong demand from upgraders, downgraders and permanent residents, said Mr Eugene Lim, assistant vice-president of property agency ERA Asia-Pacific.

Resale deals jumped 22 per cent to 7,760 transactions in the second quarter, boosted by more sales of bigger flats. A quarter of all flats sold between April and June were five-room and executive flats, said Mr Lim. 

Source : Straits Times - 26 July 2008

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Singapore URA gives go-ahead for three hotels

Singapore URA gives go-ahead for three hotels

A number of residential projects also get the nod
By KALPANA RASHIWALA

A STRING of residential, commercial and industrial projects received provisional permission from the Urban Redevelopment Authority (URA) in the second quarter of this year.

URA also gave the nod in Q2 for the development of 110,790 sq metres of business park space.
 
Far East Organization unit China Classic received provisional permission to build a 384-room hotel at Cross Street, while Hotel Plaza got the nod for a 345-room hotel at Upper Pickering Street.

Resorts World at Sentosa got the go-ahead to build a hotel with 1,352 rooms as well as 45,090 sq m of retail space in the central zone of its integrated resort.

Residential projects that received URA’s provisional permission in April-June this year include Frasers Centrepoint’s 717-unit condo at Lakeside Drive in the Boon Lay area, Chip Eng Seng’s 372-unit condo at Elias Road in Pasir Ris; and UOL/Peak Century’s 643-unit condo at Simei Street 4. All these projects have 99-year leasehold tenure.

EC Prime Pte Ltd - controlled by Melvin Poh, Tan Koo Chuan and Saw Pik Kee - received approval to develop 228 apartments at Alexandra Road.
URA also gave the nod in Q2 for the development of 110,790 sq m of business park space in three new projects - to Soilbuild Group Holdings to develop a facility named Solaris at Ayer Rajah Avenue/Fusion Walk (42,780 sq m); to Lawrence Leow’s Crescendas Bionix Pte Ltd to develop 41,200 sq m at Biopolis Phase 3; and to Ascendas for a project at Changi Business Park Crescent (26,810 sq m). Business park space can meet the office needs of some firms, for example, backroom operations, URA noted.

Provisional permission for multiple-user factories were also granted for projects at Commonwealth Drive and Jalan Tepong. Trio Link Development clinched approval for a 21,570 sq m industrial development at Playfair Road.

UOB Kay Hian Trading obtained URA’s go-ahead for its transitional office development at Anthony/ Scotts roads (13,020 sq m).

URA also gave provisional permission to Ritzland Investment for 12,050 sq m of offices at Mountbatten Road.
Source : Business Times - 26 July 2008

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Singapore HDB resale market buoyant but upgrader effect still muted

Singapore HDB resale market buoyant but upgrader effect still muted

Resale price index very close to record high of Q41996; Q2 transactions up 22%
By ARTHUR SIM
THE Housing and Development Board (HDB) has announced that its Resale Price Index rose by 4.5 per cent in Q2 2008 over the previous quarter and 8.4 per cent since Q4 2007.
 
 
The number of resale transactions also increased by 22 per cent quarter on quarter to hit 7,760 transactions.

On a half-yearly basis, a total of 14,120 transactions have been recorded so far, almost half of the 29,450 transactions for the whole of 2007.

The HDB Resale Price Index is now hovering very close to the all-time peak in Q4 1996, boosted by high resale prices in estates like Queenstown and Bukit Merah where the median price for five-room flats is now around $600,000.
But while a buoyant resale market can translate into a stronger HDB upgrader base, it may still be too early for developers to count on upgraders to prop up the private residential market.

DTZ executive director and regional head for consulting and research, Ong Choon Fah, said that HDB upgraders are ’still price-sensitive’.

According to DTZ’s analysis, HDB upgraders accounted for 28 per cent of all private homes bought in Q1 2008, up from 22 per cent in the preceding quarter.

However, in 1998, when private property prices bottomed out, HDB upgrader transactions peaked at 62 per cent of all private property transactions.

And when the property market tanked again in 2002, HDB upgraders went in to buy up to 59 per cent of all private property transacted.

While the numbers suggest that HDB upgraders still find private property too expensive, Mrs Ong also pointed that HDB does now offer a ’spectrum’ of property types to cater to more specific needs and price brackets.

Mrs Ong was referring to HDB’s new Design, Build and Sell Scheme flats which have been selling well.

Sources also say that the 578-unit Park Central at AMK has received around 1,000 applications since its launch on June 23.

HDB has also launched a total of 4,524 new flats under the Build-To-Order (BTO) system for H1 2008.

ERA Asia Pacific assistant vice-president Eugene Lim points out that HDB upgraders tend to be those who sell their five-room or executive flats, and according to his analysis, this number has not increased significantly.

Five-room flats made up 26 per cent of all HDB resale transactions in Q2 2008, up from 25 per cent in the previous quarter while executive flats made up 9 per cent, up from 7 per cent quarter on quarter.

Four-room flats made up 37 per cent of all resale transactions, and Mr Lim also notes that the median price for this segment saw the highest increase by $15,000 to $300,000.

Mr Lim believes that the upgrader effect on the private property market could be curtailed by affordability too.

‘Most upgraders will be looking for properties in the $650-$750 psf bracket,’ he said.

Interestingly, the influx of new permanent residents (PRs) here has added to the demand for resale flats.

Mr Lim estimates that 20 per cent of buyers in the resale segment are PRs, up from 10-12 per cent a year ago.

However, whether PRs are partially responsible for the buoyant resale market is not known. HDB has not revealed the number of flats bought by PRs.

Perhaps a more interesting development is that the HDB Resale Price Index has begun to diverge from the private property price index, which grew by just 0.2 per cent in Q2 2008.

Still, most property consultants believe the chances of the two indices decoupling, to represent a disconnected private and public property markets, are remote.

Knight Frank director (research and consultancy) Nicholas Mak also highlights that between Q2 2002 and Q1 2004, prices of private homes fell, while HDB resale prices increased.

During this period, both indices did, however, remain relatively flat.

Mr Mak does believes that any divergence in price trends, if any, will only last for a few quarters before a correlation is re-established.

He added: ‘Both private and public sectors do relate to the same macro-economic factors.’

DTZ’s Mrs Ong also said that both sectors are linked by the ’substitutional effect’.

‘If prices are too high in the private housing market, buyers will shift to the public housing market,’ she added.

She also noted that significant shifts in price movements only tend to follow changes in housing policy and related spheres like Central Provident Fund.

Savills Singapore director (marketing and business development) Ku Swee Yong believes that HDB upgraders will eventually return to ‘lend strong support’ to the private property market, citing the interest, if not the take-up, in new mass-market launches like Livia and Clover by the Park as examples.
Source : Business Times - 26 July 2008

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Singapore Private homes to take a slower road to completion

Singapore Private homes to take a slower road to completion

Many units pushed back as costs rise and sentiment falters
By KALPANA RASHIWALA

(SINGAPORE) The latest news is good or bad - depending on your point of view. Official data now shows that the number of private homes that could be completed by end-2011 may be less than previously thought - which means residential rental and capital values could hold better than expected.

Urban Redevelopment Authority’s (URA) latest Q2 figures, based on quarterly surveys of developers, showed that 46,480 private homes are expected to be completed between Q3 2008 and end-2011. This figure is 18 per cent - or 10,021 units - lower than the figure of 56,501 units slated for completion between Q2 2008 and 2011 listed in URA’s Q1 data.

Of these, 2,587 units were completed in the second quarter and have hence been removed from the supply pipeline, URA explained. Other completions have been put on hold as some developments have been postponed - as seen in the case of some en bloc sale sites. Rising construction costs and cautious market sentiment have delayed the construction of other projects.
Notwithstanding this, URA highlighted that the total supply of new private homes in the pipeline stood at 67,569 units as at end-Q2 2008 - about the same as 67,736 units at end-Q1. However, more of these units may now see completion after 2011.

Some industry players welcomed the latest figures, which will hopefully clear up some of the question marks about home completions.

Knight Frank managing director Tan Tiong Cheng said: ‘Rents should hold better and capital values should also hold slightly better. Basically the window widens for those who’ve bought homes earlier on deferred payment schemes to clear their purchases if their units are in projects whose completions are being delayed. In short, there should be less panic selling.’

Typically, deferred payment schemes - scrapped since last October - expire when a project is completed, which is when buyers have to pay the bulk of their purchase price to developers. As a result, ’specuvestors’ tend to offload their units in projects before they are completed.

However, Mr Tan also pointed to a potential downside for developers whose projects are in the immediate vicinities of condos sold earlier. ‘As a developer, I face competition for sellers from those specuvestors who’ve bought in nearby projects for a longer period now if the project completions are delayed.’

URA’s price index for non-landed private homes in Core Central Region (CCR) dipped 0.1 per cent in Q2 over the preceding quarter - for the first time since Q1 2004, the earliest period for which such data is available.

The Q2 decline in CCR - which includes the prime districts 9, 10 and 11, the financial district and Sentosa Cove - came on the back of a 0.5 per cent drop in the price index for uncompleted homes in the region; the index for completed homes rose 0.3 per cent.

Non-landed home price index (overall, covering both completed and uncompleted units) rose 0.7 per cent in Q2 for Rest of Central Region and by 0.9 per cent in Outside Central Region.

URA’s headline islandwide price index for private homes (landed and non-landed) inched up 0.2 per cent quarter on quarter in Q2 - weaker than the 0.4 per cent flash estimate rise announced earlier this month. The index has risen 3.9 per cent in the first half from the end-2007 level - after escalating 31.2 per cent for the whole of 2007.

Looking ahead, CB Richard Ellis executive director Li Hiaw Ho said: ‘Correction of residential prices, to the tune of 5 to 10 per cent in H2 2008, will be inevitable but is likely to vary according to location, product type and target market’, citing the continued toll of the sub-prime mortgage meltdown on the global economy and high inflation.

Developers sold a total 1,525 private homes in Q2, double the Q1 volume. But overall in H1 2008, they have sold only 2,287 units, which is around just one quarter of the 9,912 units developers sold in the same period last year.

The total number of subsale transactions - often seen as a proxy for speculative activity - rose 10.6 per cent quarter on quarter to 440. Leading the pack was the Outside Central Region (OCR), where subsale volume jumped 39 per cent to 154 units. Subsales in Q2 made up 8.1 per cent of private home deals in the region, which includes mass-market locations, up from 6.7 per cent in Q1.

URA said that examples of projects that saw significant subsales in OCR in Q2 include The Centris in Jurong (15 units) and The Raintree near Bukit Timah Nature Reserve (16 units). Analysts say that The Calrose in Yio Chu Kang and Varsity Park Condo also saw at least 10 subsales each in Q2.

Some of these projects have either received Temporary Occupation Permit or will be getting it soon; investors tend to sell off units shortly before or after a project gets TOP as buyers are willing to pay a slightly higher price then, because units can be immediately rented, analysts noted.
Source : Business Times - 26 July 2008

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